-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AuawFVa8u762ZpGw8rHsseU8bS5jANBxIaJKLD4KzctproNAkbeW5Au0hD5Wb9/y e5D2lGK84KQSM+5Anrg+gg== 0000022989-96-000015.txt : 19961001 0000022989-96-000015.hdr.sgml : 19961001 ACCESSION NUMBER: 0000022989-96-000015 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960930 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPUTER DATA SYSTEMS INC CENTRAL INDEX KEY: 0000022989 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 520882982 STATE OF INCORPORATION: MD FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06002 FILM NUMBER: 96637002 BUSINESS ADDRESS: STREET 1: ONE CURIE COURT CITY: ROCKVILLE STATE: MD ZIP: 20850-4389 BUSINESS PHONE: 3019217000 MAIL ADDRESS: STREET 1: ONE CURIE COURT CITY: ROCKVILLE STATE: MD ZIP: 20850-4389 10-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended JUNE 30, 1996 Commission file number 1-6002 COMPUTER DATA SYSTEMS, INC. (Exact name of registrant as specified in its charter) MARYLAND 52-0882982 (State or other jurisdiction (IRS Employer ID No.) of incorporation or organization) ONE CURIE COURT ROCKVILLE, MARYLAND 20850-4389 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (301) 921-7000 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, PAR VALUE $.10 PER SHARE (Title of class) Indicate by check mark whether the registrant, (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ( ) The aggregate market value of the voting stock held by non-affiliates of the Corporation at September 3, 1996 was $118,328,733, based on the closing price of $21.50 per share. As of that date, 5,937,470 shares of Common Stock were issued and outstanding. DOCUMENTS INCORPORATED BY REFERENCE DOCUMENT PART OF 10-K Portions of the Definitive Proxy Statement filed pursuant to Regulation 14A Part III, Items 10-13 PART I ITEM 1. BUSINESS Principal Services Rendered - --------------------------- Computer Data Systems, Inc. (the "Corporation"), was incorporated in the State of Maryland in 1968. The Corporation provides information technology services and products including system integration, software engineering/re- engineering, development and maintenance, data base support, data center management and processing services, and telecommunications engineering. The Corporation's products include CASE tools as well as financial and accounting, debt management, loan and mortgage processing, and biometric identification systems. The Corporation's 3,200 employees serve a wide array of government and private industry customers with information technology expertise, systems, and products. The Corporation provides information technology solutions on more than 100 current contracts from 23 office locations. The Corporation's operations are concentrated in two business segments. In 1996, the Corporation reorganized these business segments into two unincorporated operating companies, CDSI Information Technology Solutions Company (CDSI ITS) and CDSI Business Applications Solutions Company (CDSI BAS). Information with respect to such business segments may be found in Note 9 to the Corporation's Consolidated Financial Statements. Of these business segments, the larger CDSI ITS (formerly Professional Services Group) primarily markets its expertise in software programming and network engineering to those federal government agencies that demand highly technical information technology solutions. CDSI ITS applies proven information technology to design, implement, and operate data center facilities, networks, imaging systems, interactive databases, automated biometric identification tools, and information management and reporting systems. CDSI BAS (formerly Data Processing Support Services Group) provides financial systems and services to include debt collection, pension trust fund support, loan processing, cash management, mortgage servicing, and fulfillment systems and services. In addition, CDSI BAS markets the Corporation's proprietary software packages and CASE re-engineering tools. The suite of CASE tools enhances the development and maintenance of COBOL programs and increases operational reliability and maintainability. CDSI BAS also operates a modern data center, which services the information processing requirements, both mainframe and client-server, of numerous federal and commercial clients. Data center services include the full range of associated technical support: LAN administration, system and data security, data integrity, user training, office automation support, hotline support, and courier services. Recent awards include new contracts with the Lockheed Martin Corporation, the Department of Transportation and the Federal Communications Commission and subcontract work for Systems Research and Applications Corporation. The Corporation also received two contracts for its i.e.FARS system with the Department of Education and the Export Import Bank of the United States. In addition, the Corporation was awarded a contract to continue to provide facilities management support with the General Services Administration Information Technology Service. The contract, covering over 900 current employees, is for one year with four one year options and has a total estimated value of $200 million through September 2001. In March 1995, the Corporation's Argentine subsidiary along with the prime contractor NetStar S.A., was awarded a contract with the Banco Social de Cordoba to automate the state-owned Quiniela lottery. However, after successfully completing acceptance testing on the prototype and investing $11 million in hardware and software development in the contract, a decree was issued by the outgoing Governor of Cordoba on his last day in office effectively cancelling all work on the contract and reopening the bidding process from the initial receipt of proposals. In July 1996, the contract was reinstated. The Corporation is currently beginning the implementation schedule. Most contracts are awarded on the basis of competitive bidding, and are generally structured as time-and-materials, cost-plus-fixed-fee, fixed- price, or unit-price contracts. Such contracts include specific objectives and performance periods ranging upwards of several years. Under time-and-materials contracts, the Corporation receives a fixed hourly rate intended to cover salary costs attributable to work performed under the contract, including related expenses and a specified profit margin. Under cost-plus-fixed-fee contracts, the Corporation is reimbursed for allowable costs and is paid a negotiated fee. Under fixed-priced and unit-priced contracts, the Corporation bears the risk of increased or unexpected costs and benefits if its costs are lower than estimated. Key factors in the award of such contracts have been technical expertise, past performance, and pricing. Market and Competition - ---------------------- A substantial number of companies offer information technology services and products that overlap and are competitive with those offered by the Corporation. These include: (1) companies that offer one or more information technology services as a main line of their business; (2) computer manufacturers who offer the same information technology services as adjunct technical support for their equipment or as separate functions; and (3) companies primarily engaged in other businesses that also outsource their information technology facilities, services and expertise. The Corporation has many competitors in each of the areas in which it does business. Some of its competitors are large, diversified firms having substantially greater financial resources and larger technical staffs than the Corporation. The primary competitive factors in the market are technical qualifications, management performance, and price. Greater emphasis on value rather than simply price considerations has been noted in recent contract awards. While the federal market for the Corporation's services is projected to grow 5-8% annually, increasing federal regulation, continuing competition for qualified technical personnel, and narrow profit margins are characteristic of this highly competitive industry. In recent years, the trend toward consolidation of existing contracts and an emphasis on fixed-price contracts has grown. Economic uncertainty and federal budget pressures continued to affect the marketplace in 1996. Dependence on Government Contracts - ---------------------------------- The Corporation's business with the federal government is subject to various risks, including the reduction or modification of contracts due to changing government needs and requirements. The Corporation's contracts are not subject to renegotiation of profits. In the event of termination for convenience, the Corporation would be reimbursed for the costs of terminating the contract. In fiscal year 1996, CDSI ITS sales to the General Services Administration were $93,249,900 (37%) and CDSI BAS sales to the Department of Education were $67,376,900 (27%). In fiscal year 1995, CDSI ITS sales to the General Services Administration and the Department of Energy were $89,117,600 (40%) and $46,160,400 (21%) respectively. CDSI BAS revenues from the Department of Education were $25,642,500 (12%) in fiscal year 1995. In fiscal year 1994, CDSI ITS sales to the General Services Administration and Department of Energy were $82,837,900 (40%) and $48,491,600 (24%), respectively. Backlog - ------- As of June 30, 1996, the Corporation had a funded backlog of approximately $161,073,400 compared to $179,998,200 as of June 30, 1995. The Corporation expects that virtually all of the backlog will be fulfilled during the current fiscal year. Most contracts are subject to termination at the convenience of the government client. Other Matters - ------------- The Corporation is not materially dependent upon any raw materials for its products and holds no material patents, licenses, or franchises. However, the Corporation offers for license its proprietary software products: Information Engineered Financial Accounting and Reporting System (i.e.FARS(TM)); Debt Management and Collection System (DMCS); Cash Management System (CMS); Automated Biometric Identification System (ABIDS(TM)); Executive Information Management System (Executive Touch(TM)) and a suite of re-engineering tools including SCAN/COBOL, SUPERSTRUCTURE(R), RETOOL(C), COBOL-METRICS, and SLEUTH. The Corporation does not experience any seasonal variations in its levels of operations, and neither the Corporation nor its subsidiaries currently have any significant foreign operations. ITEM 2. PROPERTIES The Corporation owns its corporate headquarters building at One Curie Court, Rockville, Maryland. The 130,000 square foot facility is used by both business segments. The Corporation is a partner in a general partnership which owns a 25,000 square foot office building in California, Maryland. The building has been leased to a tenant through September 1998. In connection with certain professional services contracts, the Corporation leases general office space in the following locations: Huntsville and Montgomery, Alabama; Rosslyn, Virginia; Atlanta, Georgia; Fort Worth and San Antonio, Texas; Beavercreek, Ohio; Mt. Prospect, Illinois; Vicksburg, Mississippi; Pensacola, Florida; Kansas City, Kansas; St. Louis, Missouri; Denver, Aurora and Fort Collins, Colorado; Bedford, Indiana; New Orleans, Louisiana; Cambridge Massachusetts; Cary, North Carolina; and Midwest City, Oklahoma. The leases provide space ranging from 500 to 35,000 square feet and annual extension options concurrent with the Corporation's current contract performance periods. In the opinion of management, the Corporation's current space is adequate for its operating needs. ITEM 3. LEGAL PROCEEDINGS The Corporation is party to various legal proceedings arising in the normal course of its business. Management of the Corporation does not believe that the outcome of any of these proceedings will have a material adverse effect on the Corporation. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The Corporation's common stock, par value $.10 per share ("Common Stock") is publicly traded on the Nasdaq Stock Market ("Nasdaq") and is quoted under the symbol "CDSI." As of September 3, 1996, there were 678 record holders of Common Stock. The number of record holders was determined from the records of the Corporation's transfer agent and does not include beneficial owners of Common Stock whose shares are held in the names of various securities brokers, dealers and registered clearing agencies. The Corporation estimates that there are approximately 3,000 stockholders. The following table sets forth the high and low sales prices on the Nasdaq for the Common Stock and dividends per share paid for fiscal years 1995 and 1996.
1995 - 1996 1994 - 1995 DIVIDENDS PER SHARE Quarter High Low High Low 1996 1995 - ------- ---- --- ---- --- ---- ---- First $11 3/4 $ 9 5/8 $14 1/4 $10 3/4 $ .05 $ .05 Second 16 10 12 1/2 8 3/4 Third 19 1/4 11 3/4 10 1/2 8 1/2 .06 .05 Fourth 24 1/4 15 1/2 11 1/4 9 1/2
The Corporation has paid semi-annual dividends since 1976. The payment and amount of any future dividends will necessarily depend upon the existing conditions, including the Corporation's earnings, financial condition, working capital requirements, and other factors. ITEM 6. SELECTED FINANCIAL DATA
1996 1995 1994 1993 1992 ---- ---- ---- ---- ---- Revenues $ 251,098,700 $ 220,667,000 $ 205,923,300 $ 180,958,500 $ 141,698,600 Costs & expenses 235,368,600 207,903,800 193,706,500 172,245,800 136,296,900 -------------- -------------- -------------- -------------- -------------- Income from operations 15,730,100 12,763,200 12,216,800 8,712,700 5,401,700 Interest and other income, net 267,900 420,000 290,400 71,000 198,200 -------------- -------------- -------------- -------------- -------------- Income before income taxes 15,998,000 13,183,200 12,507,200 8,783,700 5,599,900 Provision for income taxes 6,228,800 5,132,300 4,777,800 3,276,300 2,088,800 -------------- -------------- -------------- -------------- -------------- Net Income $ 9,769,200 $ 8,050,900 $ 7,729,400 $ 5,507,400 $ 3,511,100 ============== ============== ============== ============== ============== Net Income per Common Share $ 1.65 $ 1.36 $ 1.31 $ .97 $ .64 Dividends per Common Share $ .11 $ .10 $ .09 $ .08 $ .075 Total assets $ 103,053,900 $ 84,923,000 $ 77,295,900 $ 68,189,300 $ 57,665,800 Long-term debt $ 4,533,300 $ 6,133,300 $ 10,905,200
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 1996 Compared With 1995 - ----------------------- Revenues in fiscal year 1996 increased approximately 14% from 1995. The increase resulted primarily from the CDSI BAS (formerly Data Processing Support Services) Department of Education contract. CDSI BAS revenues grew 95% primarily as a result of $42 million growth in the Department of Education contract. The expiration of a large CDSI ITS (formerly Professional Services) contract during 1995 and the reduced scope on the Department of Energy contract partially offset the increase in revenues. In fiscal year 1996, CDSI ITS accounted for 65% of consolidated revenues and 60% of income from operations. CDSI BAS accounted for 35% of consolidated revenues and 40% of income from operations for the year. Costs and expenses increased approximately 13%. Costs which contributed to the increase in expenses included a significant increase in subcontractor costs primarily related to our Department of Education contract, investments in software for the Corporation's internal systems, and continued emphasis on marketing initiatives. Income from operations was $15,730,100 compared to $12,763,200 in the prior period. Operating margins increased to 6.3% from 5.7%. Margins increased principally as a result of higher volume levels on contracts in both segments. Concurrent with the higher revenue volumes, reductions in i.e.FARS proprietary development costs, proposal protest costs, and proposal costs related to the Argentina gaming contract aided the margin improvement. Interest and other income, net decreased by $152,000 due to higher investment gains more than offset by increased interest expense arising from larger borrowing under the Corporation's line of credit for equipment commitments on the Argentina contract and accounts receivable growth. The provision for income taxes increased due to higher operating income before income taxes. Net income increased by $1,718,300 due to improved operating results. 1995 Compared With 1994 - ----------------------- Revenues in fiscal year 1995 increased approximately 7% from 1994. The increase resulted primarily from the Data Processing Support Services Group's Department of Education contract and growth on several contracts in the Professional Services Group. Data Processing Support Services Group revenues grew 70% primarily as a result of $14 million growth in the Department of Education contract. The expiration of two large Professional Services Group contracts during 1994 and the reduced contract scope resulting from the settlement of the Department of Energy contract protest partially offset the increase in revenues. In fiscal year 1995, Professional Services accounted for 80% of consolidated revenues and 89% of income from operations. Data Processing Support Services accounted for 20% of consolidated revenues and 11% of income from operations for the year. Costs and expenses increased at approximately the same rate as the growth in revenues. Costs which contributed to the increase in expenses included corporate investments in software development, marketing initiatives, and continuing development of Centers of Expertise. Increases in expenses were mitigated by cost reduction efforts which included reduced interest expense resulting from the repayment of the note payable ($370,600) and operating efficiencies realized on the expanding contract base. Income from operations was $12,763,200 compared to $12,216,800 in the prior period. Operating margins decreased to 5.7% from 5.9%. Lower margins in the initial phases of new contracts in the Data Processing Support Services Group and the corporate investments noted above contributed to the decline in operating margins. Interest and other income, net increased by $129,600, principally due to a $115,000 gain on the unwinding of an interest rate swap associated with the note payable, prepaid in September 1994. The provision for income taxes increased due to higher operating income before income taxes and an increase from 38.2% to 38.9% in federal and state tax rates. Net income increased by $321,500 due to improved operating results. 1994 Compared With 1993 - ----------------------- Revenues in fiscal year 1994 increased approximately 14% from 1993. The increase resulted primarily from new contracts in the Professional Services and Data Processing Support Services Groups and increased funding on several major contracts in the Professional Services Group. The increase was tempered by the loss of the General Services Administration Eastern Zone contract ($12 million annual revenues), which expired in March 1994. Data Processing Support Services Group revenues grew 45% as the new Department of Education contract more than offset reduced licensing and mainframe processing services. In fiscal year 1994, Professional Services accounted for 87% of consolidated revenues and 85% of income from operations. Data Processing Support Services accounted for 13% of consolidated revenues and 15% of income from operations for the year. Costs and expenses increased approximately 12%, a lower rate than the increase in revenues. This resulted from operating efficiencies realized as the Corporation's business base expanded, higher margins on new contracts replacing previous contracts, and a $732,100 savings in interest expense charged to other general and administrative expenses due to the April 1993 refinancing of the headquarters building mortgage. The positive effects were offset in part by increased bid and proposal expenses, legal costs associated with the Department of Energy bid protest, and software development costs of $600,000. Income from operations was $12,216,800 compared to $8,712,700 in the prior period. Operating margins improved to 5.9% from 4.8%. The improvement is attributable to higher margins on new contracts and operating efficiencies. Interest and other income, net increased by $219,400 due to higher available investment balances, reduced line of credit borrowings, and investment gains. The provision for income taxes increased due to higher operating income and higher federal and state tax rates. Net income increased by $2,222,000 due to the improved operating results. Liquidity - --------- The Corporation's working capital increased by $3,952,900 to $29,966,700 at June 30, 1996. The increase was attributable to net income retained after dividends paid of $633,000 offset by capital expenditures of approximately $9.7 million including $4.7 million for the Argentina contract. As the Corporation bids larger, more complex contracts in both the government and commercial markets, capital expenditures may be required that are not directly reimbursable. Such commitments and other working capital requirements are expected to be met with internally generated funds. In addition, the Corporation has $22 million available its bank line of credit facilities. Increased win rates on contract proposals are an integral part of the Corporation's long-term growth. The Corporation is continuing to invest in its business development, marketing, and proposal resources. Capital Resources - ----------------- Capital expenditures in fiscal year 1996 were approximately $9,700,000 for data processing equipment and software and were funded internally. Capital expenditures in fiscal year 1997 are expected to approximate $4,000,000 and are anticipated to be funded from internally generated working capital and existing credit facilities. However, in the event the Corporation engages in any merger or acquisition activities, the additional capital that may be required will be funded from external sources. Impact of Recently Issued Accounting Standards - ---------------------------------------------- In March 1995, the FASB issued Statement No. 121, "Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. Statement 121 also addresses the accounting for long-lived assests that are expected to be disposed of. The Corporation will adopt Statement 121 in the first quarter of Fiscal Year 1997 and, based on current circumstances, does not believe the effect of adoption will be material. Effects of Inflation - -------------------- The majority of the Corporation's contracts provide for annual adjustments on prices. Increases in revenues are primarily the result of increased levels of service and product sales rather than price increases. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Auditors Consolidated Statements of Operations for the years ended June 30, 1996, 1995 and 1994 Consolidated Balance Sheets as of June 30, 1996 and 1995 Consolidated Statements of Cash Flows for the years ended June 30, 1996, 1995 and 1994 Consolidated Statements of Changes in Stockholders' Equity for the years ended June 30, 1996, 1995 and 1994 Notes to Consolidated Financial Statements for the years ended June 30, 1996, 1995 and 1994 Report of Independent Auditors To the Board of Directors and Stockholders of Computer Data Systems, Inc. We have audited the accompanying consolidated balance sheets of Computer Data Systems, Inc. and subsidiaries, as of June 30, 1996 and 1995 and the related consolidated statements of operations, changes in stockholders' equity, and cash flows for each of the three years in the period ended June 30, 1996. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Computer Data Systems, Inc. and subsidiaries at June 30, 1996 and 1995, and the consolidated results of their operations and their cash flows for each of the three years in the period ended June 30, 1996, in conformity with generally accepted accounting principles. /s/ Ernst & Young LLP Washington, D.C. July 26, 1996
COMPUTER DATA SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended June 30 ------------------- 1996 1995 1994 ---- ---- ---- Revenues $ 251,098,700 $ 220,667,000 $ 205,923,300 Costs and Expenses: -------------- -------------- -------------- Salaries, wages and benefits 135,370,400 138,758,200 141,577,500 Subcontractors 78,481,000 47,469,900 31,791,900 Travel, relocation, and subsistence 2,786,400 2,600,500 2,293,200 Rental of space and equipment 1,961,900 4,058,000 3,295,100 Depreciation and amortization 3,419,500 2,937,500 2,089,400 Other operating and administrative costs 13,349,400 12,079,700 12,659,400 -------------- -------------- -------------- 235,368,600 207,903,800 193,706,500 -------------- -------------- -------------- Income from operations 15,730,100 12,763,200 12,216,800 Interest and other income, net 267,900 420,000 290,400 -------------- -------------- -------------- Income before income taxes 15,998,000 3,183,200 12,507,200 Provision for income taxes: -------------- -------------- -------------- Current 6,453,100 4,678,300 4,946,100 Deferred (224,300) 454,000 (168,300) -------------- -------------- -------------- 6,228,800 5,132,300 4,777,800 -------------- -------------- -------------- Net Income $ 9,769,200 $ 8,050,900 $ 7,729,400 ============== ============== ============== Net income per common share $ 1.65 $ 1.36 $ 1.31 ============== ============== ============== See notes to consolidated financial statements.
COMPUTER DATA SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS June 30 1996 1995 Assets ---- ---- Current Assets: Cash and cash equivalents $ 3,639,600 $ 1,237,000 Trade accounts receivable 61,479,200 52,236,900 Deferred income taxes 1,252,300 456,600 Income tax refunds receivable 151,100 151,400 Prepaid expenses and deposits 1,255,300 1,948,300 -------------- -------------- Total Current Assets 67,777,500 56,030,200 Long-term investments 1,922,000 1,584,800 Land, building, and equipment 32,403,100 26,452,900 Other assets 951,300 855,100 -------------- -------------- Total Assets $ 103,053,900 $ 84,923,000 ============== ============== Liabilities and Stockholders' Equity Current Liabilities: Accounts payable and accrued liabilities $ 23,149,400 $ 15,652,600 Accrued wages and related benefits 13,875,000 14,363,800 Current income taxes payable 786,400 -------------- -------------- Total Current Liabilities 37,810,800 30,016,400 -------------- -------------- Deferred compensation 4,583,500 4,245,500 Deferred income taxes 409,000 599,500 Stockholders' Equity Common stock, par value $.10; 30,000,000 shares authorized; 5,867,330 shares outstanding in 1996 and 5,737,842 shares in 1995 586,700 573,800 Capital in excess of par value 7,625,900 6,014,500 Retained earnings 52,037,100 43,473,300 -------------- -------------- Total Stockholders' Equity 60,249,700 50,061,600 Commitments and contingencies (Note 10) -------------- -------------- Total Liabilities and Stockholders' Equity $ 103,053,900 $ 84,923,000 ============== ==============
See notes to consolidated financial statements.
COMPUTER DATA SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended June 30 ------------------- 1996 1995 1994 ---- ---- ---- Net Income $ 9,769,200 $ 8,050,900 $ 7,729,400 Adjustments to reconcile to net cash provided by operating activities: Depreciation and amortization 3,419,500 2,937,500 2,089,400 Deferred income taxes (224,300) 454,000 (168,300) Deferred compensation 679,600 849,100 682,200 Other (34,100) (121,800) (52,600) Net cash provided by (used in) changes in operating assets and liabilities: Accounts receivable (9,242,000) (10,002,200) 3,498,300 Prepaid expenses and deposits (68,000) (677,400) 104,200 Accounts payable and accrued liabilities 8,239,100 3,326,200 1,352,000 Accrued wages and related benefits (488,800) 1,628,300 461,500 ------------ ------------ ------------ Net cash provided by operating activities 12,050,200 6,444,600 15,696,100 ------------ ------------ ------------ Cash flows from investing activities: Capital expenditures (9,729,600) (6,982,800) (6,101,400) Proceeds from sale of equipment 217,400 207,100 23,800 Purchase of long-term investments (174,400) (166,800) (165,000) Other (38,300) (33,700) (148,400) ------------ ------------ ------------ Net cash used in investing activities (9,724,900) (6,976,200) (6,391,000) ------------ ------------ ------------ Cash flows from financing activities: Payments on notes payable (8,000,000) (7,633,300) (1,600,000) Borrowings on note payable 8,000,000 1,500,000 Cash dividends (633,000) (571,600) (506,800) Exercise of stock options 1,051,900 309,200 951,200 Payment of deferred compensation (341,600) (17,800) (68,600) ------------ ------------ ------------ Net cash provided by (used in) financing activities 77,300 (6,413,500) (1,224,200) ------------ ------------ ------------ Net (decrease) increase in cash and cash equivalents 2,402,600 (6,945,100) 8,080,900 ------------ ------------- ------------ Cash and cash equivalents at beginning of year 1,237,000 8,182,100 101,200 ------------ ------------ ------------ Cash and cash equivalents at end of year $ 3,639,600 $ 1,237,000 $ 8,182,100 ============ ============ Supplemental cash flow information: Interest paid $ 230,400 $ 95,100 $ 448,500 Income taxes paid $ 5,704,400 $ 4,513,100 $ 4,627,200
See notes to consolidated financial statements.
COMPUTER DATA SYSTEMS, INC. Consolidated Statements of Changes in Stockholders' Equity Years Ended June 30, 1996, 1995, and 1994 ----------------------------------------- Capital in Common Stock Excess of Retained Shares Amount Par Value Earnings Total ------ ------ ---------- -------- ----- Balance at June 30, 1993 5,569,878 $ 557,000 $ 4,266,000 $ 29,276,300 $ 34,099,300 Exercise of stock options, net 120,041 12,000 926,600 (359,000) 579,600 Tax benefit arising from exercise of non- qualified stock options 371,600 371,600 Cash dividends (506,800) (506,800) Net income for the year 7,729,400 7,729,400 --------- ------------ ------------ ------------ ------------ Balance at June 30, 1994 5,689,919 569,000 5,564,200 36,139,900 42,273,100 Exercise of stock options, net 47,923 4,800 318,100 (145,900) 177,000 Tax benefit arising from exercise of non-qualified stock options 132,200 132,200 Cash dividends (571,600) (571,600) Net income for the year 8,050,900 8,050,900 --------- ------------ ------------ ------------ ------------ Balance at June 30, 1995 5,737,842 573,800 6,014,500 43,473,300 50,061,600 Exercise of Stock Options, net 129,488 12,900 867,900 (572,400) 308,400 Tax Benefit arising from exercise of non-qualified stock options 743,500 743,500 Cash Dividends (633,000) (633,000) Net Income for the year 9,769,200 9,769,200 --------- ------------ ------------ ------------ ------------ Balance at June 30, 1996 5,867,330 $ 586,700 $ 7,625,900 $ 52,037,100 $ 60,249,700 ========= ============ ============ ============
See notes to consolidated financial statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 1996, 1995, and 1994 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation. The consolidated financial statements include the accounts of Computer Data Systems, Inc. and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. Revenue Recognition. Revenues on time and material contracts are recorded at the contractual rates as the labor hours and direct expenses are incurred. Revenues on cost-type contracts are recorded as reimbursable costs are incurred. Revenues on fixed-price contracts are recorded on the percentage of completion basis, determined by the ratio of total incurred costs to anticipated total costs of the project. Revenues on unit-price contracts are recorded at contractual selling prices of work completed and accepted by the customer. Contract award fees are recorded based on estimated current performance levels and historical experience. Revenues on equipment and software sales are recorded when the units are delivered and installed. Immediate recognition is made of any anticipated losses. Depreciation and Amortization. Furniture, computer equipment and software, and leasehold improvements are recorded at cost and are depreciated over their estimated useful lives on the straight-line basis. Building and improvements are depreciated over a useful life of forty years. The useful lives of furniture and equipment range from five to ten years. Investments. Deferred annuity contracts included in long-term investments are carried at cost plus accrued interest, which approximates fair market value. Income Taxes. The Corporation computes deferred income taxes under the liability method. Deferred taxes are based on timing differences between financial statement and income tax purposes, using the enacted tax rates in effect during the years in which the differences are expected to reverse. Net Income Per Common Share. Net income per share of common stock is based on the weighted average number of common and common stock equivalent shares outstanding during each year. Common stock equivalent shares include the number of shares issuable upon exercise of outstanding stock options, reduced by the number of shares that could have been repurchased with the proceeds of such options. Statements of Cash Flows. For purposes of the statements of cash flows, the Corporation considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Reclassifications. Certain reclassifications have been made to prior year amounts to conform to current year classifications. Stock Based Compensation. During 1995, the Financial Accounting Standards Board (FASB) issued Statement of Financial Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation." While SFAS No. 123 established financial accounting and reporting standards for stock-based employee compensation plans using a fair value method of accounting, it allows companies to continue to measure compensation costs for those plans using the intrinsic value method of accounting prescribed in Accounting Principles Board (APB) No. 25, "Accounting for Stock Issued to Employees." As permitted by SFAS No. 123, the Corporation will not change its method of accounting for stock options but will provide the additional required disclosures beginning in fiscal 1997. Use of Estimates. The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions, in particular estimates of anticpated contract costs and revenues utilized in the earnings recognition process, that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from these estimates. 2. ACCOUNTS RECEIVABLE Trade accounts receivable contain no allowance for doubtful accounts. The components of trade accounts receivable are as follows:
June 30, 1996 June 30, 1995 ------------- ------------- U.S. Government $ 59,099,700 $ 50,693,600 Commercial 2,379,500 1,543,300 ------------ ------------ $ 61,479,200 $ 52,236,900 ============ ============ Accounts receivable include unbilled costs and accrued profits on contracts as follows: June 30, 1996 June 30, 1995 ------------- ------------- Excess of actual indirect costs over amounts currently billable under cost reimbursable contracts $ 1,293,800 $ 869,200 Contract retainages not currently billable 269,900 364,000 Fixed price work not currently billable 1,877,000 6,856,600 ------------ ------------ $ 3,440,700 $ 8,089,800 ============ ============
To the extent not billable at June 30, 1996 and 1995, unbilled costs and accrued profits above are billable upon delivery or acceptance of services, upon receipt of contract funding, or upon contract completion. Of the above unbilled costs and accrued profits at June 30, 1996, approximately $1,562,800 are not expected to be billed and collected within one year. 3. LAND, BUILDING, AND EQUIPMENT
June 30, 1996 June 30, 1995 ------------- ------------- Land $ 2,200,000 $ 2,200,000 Furniture 4,652,400 5,093,000 Computer equipment and software 29,563,200 21,728,000 Building and improvements 15,121,900 15,132,000 ------------ ------------ 51,537,500 44,153,000 Less accumulated depreciation and amortization (19,134,400) (17,700,100) ------------ ------------ $ 32,403,100 $ 26,452,900 ============ ============
4. OTHER ASSETS The Corporation maintains a program to provide senior executives with additional life insurance coverage, supplementing the coverage available under the Corporation's group insurance plan. Under the program, officers participate with the Corporation in the payment of premiums. The Corporation has an interest in such policies to the extent of its accumulated premium payments. 5. LINE OF CREDIT The Corporation has an $8 million, three-year revolving credit and a $14 million demand facility. Interest rates on these unsecured facilities are at LIBOR plus 110-120 basis points. Interest expense on the Corporation's line of credit facilities was $185,400, $1,600, and $3,200 in 1996, 1995, and 1994 respectively. Such interest expense is included in the interest and other income, net. 6. STOCK OPTIONS The Corporation has granted incentive and non-qualified stock options to certain employees and non-employee directors under the 1982 plan, which expired in 1992. The employee options are exercisable in cumulative annual installments after one year and before the end of the fourth year from date of grant. The non-employee director options become exercisable in annual installments over a five-year period. At June 30, 1996, there are no options available to purchase shares. The following table summarizes the changes in the number of common shares under the 1982 option plan during fiscal years 1996, 1995, and 1994.
Number Per Share 1982 Plan of Shares Option Price - --------- --------- ------------ Outstanding Balance at June 30, 1993 189,836 $ 4.88 - $ 7.69 Exercised (117,734) 4.88 - 7.69 Expired (29,700) 4.88 - 7.69 -------- ------------------ Outstanding Balance at June 30, 1994 42,402 4.88 - 5.50 Exercised (32,400) 5.50 -------- ------------------ Outstanding Balance at June 30, 1995 10,002 4.88 Exercised (10,002) $ 4.88 ======== ==================
In November 1991, the stockholders approved a long-term incentive plan that provides for the granting of incentive awards to various employees and officers of the Corporation. The plan also provides for the annual grant of non- qualified options for 1,500 shares to each of the non-employee directors. The employee options are exercisable in cumulative annual installments after one year and before the end of the fifth year. The non-employee directors' options are fully exercisable one year after grant and before the end of the fifth year. At June 30, 1996, options to purchase 166,017 shares are exercisable. The following table summarizes the changes in the number of common shares under the 1991 option plan during fiscal years 1996, 1995, and 1994.
Number Per Share 1991 Plan of Shares Option Price - --------- --------- ------------ Outstanding Balance at June 30, 1993 298,150 $ 4.19 - $ 9.50 Granted 178,400 8.75 Exercised (35,983) 4.19 - 5.75 Expired (12,300) 4.19 - 9.50 --------- ------------------- Outstanding Balance at June 30, 1994 428,267 4.19 - 8.75 Granted 144,900 11.50 - 14.13 Exercised (29,600) 4.19 - 8.75 Expired (6,000) 8.75 - 14.13 --------- ------------------- Outstanding Balance at June 30, 1995 537,567 4.19 - 14.13 Granted 219,900 10.50 - 21.75 Exercised (148,050) 4.19 - 14.13 Expired (29,700) 4.19 - 14.13 --------- ------------------- Outstanding Balance at June 30, 1996 579,717 $ 4.19 - $21.75 ========= ===================
Proceeds from the exercise of options are credited to the capital accounts in the year the options are exercised. The Corporation received 28,564, 14,077, and 41,676 shares in payment for the exercise of 104,168, 31,200, and 61,200 shares under option during the years ended June 30, 1996, 1995, and 1994, respectively. 7. EMPLOYEE INCENTIVE PLANS The Corporation has incentive compensation plans for officers and certain key employees. The incentive compensation plans' formulas are reviewed and approved annually by the Board of Directors. Operations were charged $2,742,200, $2,546,600, and $2,496,600 to fund the incentive compensation plans for the years ended June 30, 1996, 1995, and 1994, respectively. Under the terms of the incentive compensation plans, officers may elect to defer payment of all or a portion of the amount awarded under the plan until retirement or termination of employment with the Corporation. The deferred amounts earn interest, compounded quarterly at the greater of the current 13-week Treasury bill rate effective the beginning of each quarter, or 7%. The Corporation has defined contribution retirement plans for eligible employees. Contributions to the plans are discretionary as determined by the Board of Directors. Operations were charged $2,079,300, $1,974,500 and $2,083,300 to fund the plans in 1996, 1995, and 1994, respectively. Under terms of the plans, contributions for the benefit of certain long-term employees are made to a non-qualified supplemental deferred retirement account. 8. PROVISION FOR INCOME TAXES The income tax provision is summarized as follows:
1996 1995 1994 ---- ---- ---- Federal income taxes: Current $ 5,446,000 $ 4,210,500 $ 4,178,000 Deferred (189,300) 408,600 (150,600) ------------ ------------ ------------ Total federal income taxes 5,256,700 4,619,100 4,027,400 ------------ ------------ ------------ State income taxes: Current 1,007,100 467,800 768,100 Deferred (35,000) 45,400 (17,700) ------------ ------------ ------------ Total state income taxes 972,100 513,200 750,400 ------------ ------------ ------------ Total income taxes provided $ 6,228,800 $ 5,132,300 $ 4,777,800 ============ ============ ============
The difference between the tax provision and the amount computed by applying the federal statutory income tax rate to income before income taxes is as follows:
1996 1995 1994 ---- ---- ---- Income tax computed at federal statutory rate $ 5,599,800 $ 4,610,300 $ 4,274,900 Add: State income tax, net of federal tax benefit 629,000 522,000 502,900 ------------ ------------ ------------ Total income taxes $ 6,228,800 $ 5,132,300 $ 4,777,800 ------------ ------------ ------------ Effective tax rate 38.9% 38.9% 38.2% ============ ============ ============
Deferred tax assets and liabilities on the balance sheets reflect the net tax effect of temporary differences between carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes. The Corporation believes a valuation allowance is not required. The components of the Corporation's deferred tax assets and liabilities at June 30, 1996 and 1995 are as follows:
Deferred Tax Assets (Liabilities) --------------------------------- 1996 1995 ---- ---- Deferred compensation $ 1,760,000 $ 1,613,300 Depreciation and amortization (2,085,000) (1,958,700) Annuity interest (400,700) (381,200) Accrued vacation benefits 618,100 674,200 Stock Options 779,800 39,200 Other 170,200 (129,700) ------------ ----------- Total deferred taxes, net $ 842,400 $ (142,900) ============ ===========
9. BUSINESS SEGMENT INFORMATION The Corporation operates in two business segments: CDSI ITS (formerly Professional Services) and CDSI BAS (formerly Data Processing Support Services). CDSI ITS encompass consulting, systems development, and programming. CDSI BAS includes a variety of activities primarily concerned with the processing of data for customers who require computer-based support services and equipment and software sales. Services range from the complete processing and preparation of reports from data supplied by customers, including related programming support, to individual specialized services such as data entry. Financial information by business segment for the years ended June 30 is summarized as follows:
1996 1995 1994 ---- ---- ---- Revenues: CDSI ITS $ 163,433,700 $ 175,851,500 $ 179,519,200 CDSI BAS 99,361,700 54,879,000 34,683,800 Intersegment (11,696,700) (10,063,500) (8,279,700) ------------- -------------- ------------- Total Revenues $ 251,098,700 $ 220,667,000 $ 205,923,300 ============= ============== ============= Income from operations: CDSI ITS $ 9,462,600 $ 11,381,500 $ 10,332,700 CDSI BAS 6,266,500 1,381,700 1,884,100 ------------- ------------- ------------- 15,730,100 12,763,200 12,216,800 Interest and other income, net 267,900 420,000 290,400 ------------- ------------- ------------- Income Before Income Taxes $ 15,998,000 $ 13,183,200 $ 12,507,200 ============= ============= ============= Identifiable assets: CDSI ITS $ 48,432,400 $ 42,293,200 $ 34,959,900 CDSI BAS 36,742,200 27,809,700 18,894,400 Corporate assets 17,879,300 14,820,100 23,441,600 ------------- ------------- ------------- Total Assets $ 103,053,900 $ 84,923,000 $ 77,295,900 ============= ============= ============= Depreciation and amortization expense: CDSI ITS $ 200,900 $ 86,000 $ 27,000 CDSI BAS $ 2,492,600 $ 2,165,800 $ 1,405,400 Corporate assets $ 726,000 $ 685,700 $ 657,000 Capital expenditures: CDSI ITS $ 5,193,100 $ 3,472,800 $ 120,800 CDSI BAS $ 3,714,500 $ 2,882,800 $ 5,393,200 Corporate assets $ 822,000 $ 627,200 $ 587,400
For the years ended June 30, 1996, 1995, and 1994, substantially all CDSI ITS revenues and 93%, 89%, and 81%, respectively, of CDSI BAS revenues were derived from federal government agencies. CDSI ITS revenues from one government agency under various contracts were $93,249,900 in 1996. CDSI BAS revenues from one government agency were $67,376,900 in 1996. CDSI ITS revenues from two government agencies under various contracts were $89,117,600 and $46,460,400 in 1995. CDSI BAS revenues from one government agency were $25,642,500 in 1995. CDSI ITS revenue from two government agencies under various contracts were $82,837,900 and $48,491,600 in 1994. No other customers account for 10% or more of total revenues. Intersegment revenues represent primarily unit price costs billed for general corporate purposes. 10. COMMITMENTS AND CONTINGENCIES The Corporation leases office and warehouse space and equipment under agreements that provide for minimum aggregate rentals through 1999 as follows: Fiscal Year Minimum Aggregate Rentals ----------- ------------------------- 1997 $ 690,800 1998 214,900 1999 6,100 In addition, the office space leases provide for escalation and pass-through of increases in operating expenses and renewal options. Government contracts are subject to review and audit by various governmental authorities in the normal course of the Corporation's business. Cost audits have been completed through fiscal 1993. In management's opinion, any such reviews and the results of cost audits for subsequent fiscal years will not have a material effect on the Corporation's financial position or results of operations. The Corporation is a party to various legal proceedings arising in the normal course of business. Management believes that the outcome of these proceedings will not have a material adverse effect on the Corporation. 11. QUARTERLY FINANCIAL DATA (UNAUDITED)
Income Before Net Net Income Revenues Income Taxes Income Per Share -------- ------------ ------ ----------- 1995 - 1996 September 30 $ 59,873,000 $ 3,690,300 $ 2,251,000 $ .38 December 31 61,183,200 3,469,800 2,111,800 .36 March 31 64,199,300 4,332,200 2,649,300 .44 June 30 65,843,200 4,505,700 2,757,100 .47 1994 - 1995 September 30 $ 54,230,900 $ 2,762,100 $ 1,674,600 $ .28 December 31 51,968,400 2,362,400 1,426,600 .24 March 31 57,774,600 3,621,700 2,235,900 .38 June 30 56,693,100 4,437,000 2,713,800 .46
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS Information called for by this Item is set forth under the captions "Item 1: Election of Directors," "Executive Officers," and "Other Matters" in the Corporation's definitive proxy statement filed pursuant to Regulation 14A, which information is hereby incorporated by reference and made a part hereof. ITEM 11. EXECUTIVE COMPENSATION Information called for by this Item is set forth under the captions "Compensation of Directors," "Summary Compensation Table," "Options Grants in Last Fiscal Year," "Aggregate Option Exercises in Last Fiscal Year and Year-End Option Values," and "Five-Year Stockholder Return Comparison" in the Corporation's definitive proxy statement filed pursuant to Regulation 14A, which information is hereby incorporated by reference and made a part hereof. ITEM 12. SECURITY OWNERSHIP OF MANAGEMENT Information called for by this Item is set forth under the captions "Information With Respect to Certain Stockholders" and "Securities Ownership of Directors and Executive Officers" in the Corporation's definitive proxy statement filed pursuant to Regulation 14A, which information is hereby incorporated by reference and made a part hereof. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K (a) Index to Consolidated Financial Statements Data submitted herewith under Item 8: Consolidated Statements of Operations for the years ended June 30, 1996, 1995 and 1994 Consolidated Balance Sheets as of June 30, 1996 and 1995 Consolidated Statements of Cash Flows for the years ended June 30, 1996, 1995 and 1994 Consolidated Statements of Changes in Stockholders' Equity for the years ended June 30, 1996, 1995 and 1994 Notes to Consolidated Financial Statements for the years ended June 30, 1996, 1995 and 1994 Schedules otherwise required to be listed under Item 14(d) are inapplicable and therefore have been omitted. (b) Reports on Form 8-K On April 11, 1996, the Corporation filed a current Report on Form 8- K pursuant to the Item 5 thereof, reporting that Peter A. Bracken would join the Corporation as President and Chief Executive Officer effective May 13, 1996. On June 14, 1996, the Corporation field a current Report on Form 8-K pursuant to Item 5 thereof, reporting (i) a reorganization of the Corporation's businesses into two unincorporated divisions (CDSI Information Technology Solutions Company and CDSI Business Applications Solutions Company); and (ii) the reaward of the Corporation's contract with the General Services Administration Southeast Sunbelt and Great Lakes Regions. (c) Exhibits 3.1 Restated Articles of Incorporation of the Corporation, as amended, included as an exhibit to the Corporation's Form 10-Q Quarterly Report for the three months ended December 31, 1988 filed February 14, 1989 are incorporated herein by reference. 3.2 By-laws of the Corporation, as amended, included as an exhibit to the Corporation's Form 10-K Annual Report for the fiscal year ended June 30, 1988 filed September 14, 1988 are incorporated herein by reference. 10.1 Certificate of Limited Partnership and Limited Partnership Agreement - M/GA Fields Roads Limited Partnership included as an exhibit on Form 8 to Form 10-K filed March 1, 1989 are incorporated herein by reference. 10.2 1982 Incentive Stock Option Plan, as amended and restated, which appears as Exhibit A to the Prospectus in Registration Statement No. 33-27300 is incorporated herein by reference. 10.3 1991 Long-Term Incentive Plan, as amended and restated as of July 12, 1994, included as an exhibit to the Corporation's Form 10-K Annual Report for the fiscal year ended June 30, 1994, filed September 28, 1994, is incorporated herein by reference. 10.4 Incentive Compensation Plan, restated as of July 1, 1994, included as an exhibit to the Corporation's Form 10-K Annual Report for the fiscal year ended June 30, 1994, filed September 28, 1994, is incorporated herein by reference. 10.5 U.S. Department of Education Contract No. PM94017001 (portions of which are subject to an Order for Confidential Treatment pursuant to Rule 24b-2) included as an exhibit to the Form 10-Q/A filed August 24, 1994 is incorporated herein by reference. *10.6 Letter agreement dated April 9, 1996 between the Corporation and Gordon S. Glenn. *11 Statement re: Computation of Per Share Earnings. *13 1996 Definitive Proxy Materials of the Corporation (portions of which are incorporated herein by reference). *21 Significant Subsidiaries of the Corporation. *23 Consent of Ernst & Young LLP, Independent Auditors. *27 Financial Data Schedule. ___________________ * = Filed herewith. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Rockville, Maryland on September 27, 1996. Computer Data Systems, Inc. By /s/ Peter A. Bracken -------------------- Peter A. Bracken President and Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
Signature Title Date - --------- ----- ---- /s/ Peter A. Bracken ____________________ President and Chief Executive September 27, 1996 Peter A. Bracken Officer; Director (Principal Executive Officer) /s/ Wyatt D. Tinsley Executive Vice President; ____________________ Director September 27, 1996 Wyatt D. Tinsley Principal Financial and Accounting Officer) /s/ Clifford M. Kendall Chairman of the Board of September 27, 1996 _______________________ Directors; Director Clifford M. Kendall /s/ Raymond B. Hoxeng Director September 27, 1996 - --------------------- Raymond B. Hoxeng /s/ Hilliard W. Paige Director September 27, 1996 - --------------------- Hilliard W. Paige /s/ Elmer B. Staats Director September 27, 1996 - ------------------- Elmer B. Staats /s/ Paul R. Ignatius Director September 27, 1996 - -------------------- Paul R. Ignatius /s/ James A. Parker Director September 27, 1996 - ------------------- James A. Parker
EXHIBIT INDEX Page Number 10.6 Letter Agreement dated April 9, 1996 between the Corporation and Gordon S. Glenn. 11 Statement re: Computation of Per Share Earnings. 13 1996 Definitive Proxy Materials of the Corporation (portions of which are incorporated by reference). 21 Significant Subsidiaries of the Corporation. 23 Consent of Ernst & Young LLP, Independent Auditors. 27 Financial Data Schedule. EX-10 2 Exhibit 10.6 ------------ April 9, 1996 Gordon S. Glenn 10705 Stapleford Hall Drive Potomac, Maryland 20854 Dear Gordon: This letter confirms the agreement between you and CDSI regarding the terms of your separation from employment. CDSI'S OBLIGATIONS CDSI agrees as follows: 1. Voluntary resignation. During the period between May 1, 1996 and July 31, 1996, you will hold the title of Senior Advisor and will be on paid status as a full-time employee and available for consultation with CDSI. You agree to resign from your positions as director and officer of CDSI, and from any positions held in any subsidiary or corporate affiliate thereof, effective April 30, 1996. CDSI agrees that it will not contest your claim, if any, for unemployment benefits. 2. Severance Payment. You will receive a one-time severance payment in the amount of $100,000, less appropriate tax deductions on June 30, 1996. You acknowledge that this severance payment constitutes special consideration in exchange for your promises under this Agreement, and that CDSI is not otherwise obligated to provide this payment. Payment of the amount due under this paragraph will be made by check mailed to your home address. 3. Benefits and COBRA Coverage. Your employment benefits will not be continued, except as required by law, beyond the time periods in which such benefits would normally be paid under the terms of CDSI's employment benefits plans for similarly situated employees terminated on July 31, 1996. You are entitled to purchase continued medical and dental coverage under COBRA (Consolidated Omnibus Budget Reconciliation Act) for a period of 18 months, effective July 31, 1996. You will continue to receive a car allowance of $450 per month through June 30, 1996. 4. Options. Your outstanding options will be exercisable, and will expire, pursuant to the terms of their respective stock option agreements. 5. Consulting Agreement. CDSI agrees to retain you as an independent contractor at a fee of $21,500 per month from August 1, 1996 to May 31, 1997 in order to permit CDSI at its discretion to take advantage of the specialized knowledge and expertise that you have developed during your employment with CDSI. You agree to hold yourself available for this ten-month period for consultation with representatives of CDSI, it being understood that both CDSI and you will act in good faith to enable you to provide services without unreasonably interfering with your other obligations. This Consulting Agreement shall terminate upon your securing full-time employment, or on May 31, 1997, whichever occurs earlier. 6. Bonus. You will be eligible for a bonus under the Executive Incentive Compensation Program in the same manner as other individuals who are participants in that program as of June 30, 1996. 7. Fiscal Year 1996 Executive Incentive, Retirement Allocation, and Ten-Year Supplemental Contribution. You will receive the executive incentive, retirement allocation and deferred compensation contribution for fiscal year 1996 in accordance with the provisions of the CDSI Incentive and Compensation Plan (key executives' plan), the retirement plan for employees of CDSI, and the Supplemental Deferred Compensation Plan (Ten-Year, Highly Compensated Employees' Plan), respectively, in accordance with each of those plans' provisions in the same manner as other similarly situated participants in employment on June 30, 1996. 8. References. CDSI's Chairman, Clifford Kendall, will refer favorably to your service for CDSI when he announces the new CEO, and in subsequent public statements. He will also provide a favorable recommendation any time an employer or prospective employer seeks an evaluation or reference pertaining to you. Mr. Kendall will provide a favorable written recommendation (letter reference) to you, if desired. 9. Secretarial Support and Mailing Address. CDSI will allow you to use CDSI's corporate headquarters as a mailing address and provide limited telephone and secretarial support for you through December 31, 1996 or such earlier date as you secure alternative employment. 10. Equipment. Notwithstanding the terms of the Professional Agreement regarding the return of CDSI property, you may retain the laptop and docking station currently in your office at CDSI and the CDSI computer equipment installed in your home as of the date of this Agreement. In the event you wish to retain the monitor and printer currently in your office (in addition to the monitor and printer installed in your home), you may purchase them from the Company at a price equal to the value of such equipment as reflected in the Company's books (approximately $2,000). YOUR OBLIGATIONS In consideration of CDSI's Agreement to provide the foregoing benefits and payments to you, you agree as follows: 11. General Release. On your own behalf and on behalf of your representatives, heirs, successors, and assigns, you hereby release and forever discharge CDSI, its officers, directors, representatives, agents, insurers and employees from any and all causes of action, claims, contracts, agreements, promises, liabilities, demands, costs or expenses of any nature, fixed or contingent, known or unknown, accrued or unaccrued, that you may have arising out of your employment with CDSI and your separation therefrom, up through the date of your execution of this Agreement, including but not limited to any action, claim or lawsuit based in tort, contract (expressed or implied), or under common law principles, or any federal, state or local law, statute or regulation (including but not limited to all claims under the Age Discrimination in Employment Act, 29 U.S.C. section621 et seq., and all claims for any other kind of employment discrimination, wrongful discharge, breach of contract, tort, personal injury or attorney's fees). You further covenant and agree never to join, participate in, encourage or commence any action, suit or proceeding in law or in equity, or before any local, state or federal administrative agency, against CDSI pertaining to any events which occurred prior to the date of execution of this Agreement. It is expressly agreed and understood that this Agreement is a General Release. 12. Covenant Not to Compete or Solicit. You agree that for an eighteen-month period following your termination, you will not solicit or divert to a competitor, or retain on behalf of a competitor, any individual or entity who is a customer of CDSI, was a customer at any time during the preceding 12 months, or was an individual or entity to whom CDSI was marketing during the 12 months prior to your resignation. You further agree that for an eighteen-month period following your termination, you will not, either directly or indirectly, employ or seek to employ any person who is at the time or was within the previous six months employed by CDSI, without the prior express permission of CDSI, which CDSI may in its absolute discretion withhold. 13. Waiver of Employment Rights. You agree to waive any rights that you may have to employment with CDSI, including any right that may be created by any future legal action against CDSI. 14. Cooperation. You agree that you will cooperate in the future with CDSI, if necessary, in the same manner you would have cooperated as an employee, in connection with matters arising as a result of your former responsibilities with CDSI. OTHER PROVISIONS Both you and CDSI agree as follow: 15. Confidentiality. You and CDSI agree to keep the existence and terms of this Agreement confidential, except as may be required by law, such as when disclosure is required by a legally served subpoena, audit of tax returns or federal reporting requirements. Notwithstanding the foregoing, you may discuss this Agreement with your attorneys, tax advisors and immediate family. 16. Mutual Non-Defamation. CDSI agrees that it will not slander or libel you either in regard to the reasons for your separation from employment with CDSI, or your job performance and conduct while still employed by CDSI. You agree that you will not slander or libel CDSI or any of its directors, officers or employees concerning either their conduct regarding your separation or their conduct at any time during your period of employment with CDSI. 17. Choice of Law and Severability. This Agreement shall be construed, enforced and governed by the laws of Maryland, excluding its choice of law provisions. In the event that any provision of this Agreement is later held to be unenforceable, such holding will not affect any other provision of this Agreement and the Agreement should be enforced as if the unenforceable provision had not been included in it. 18. Nature of the Agreement. You and CDSI acknowledge that this is the sole and entire separation agreement between you and CDSI. Furthermore, no supplement, modifications or amendment of this Agreement shall be valid or binding unless in writing and signed by both parties to this Agreement. In making this Agreement, both you and CDSI certify that you only relied on the representations included in this Agreement. 19. Non-Admissions. You and CDSI agree that this letter shall not be construed as an admission of liability by you, CDSI, or CDSI's officers, directors, agents or employees. 20. Confidential Information. You acknowledge that, by reason of your employment, you have had access to confidential information about the Company, its products, services and clients, including, without limitation, information and knowledge pertaining to products, inventions, innovations, designs, ideas, trade secrets, and proprietary information; research, development and test results; specifications, data, know-how and formats; manufacturing, packaging, advertising, distribution and sales methods; sales and profit figures; marketing plans, business plans, strategies, forecasts, unpublished financial information and budgets; personnel information; customer and client lists; and information regarding the history of and relationships between the Company and dealers, distributors, sales representatives, wholesalers, customers, clients, suppliers and others ("Confidential Information"). You further acknowledge that such Confidential Information is a valuable and unique asset of the Company and covenant that, following your resignation, you will not disclose any Confidential Information to any person without the prior written authorization of the Board of Directors. You agree that following your resignation, you will promptly return to the Company any documents, files or other materials in your possession or custody, with the exception of documents relating to compensation or benefits to which you are entitled following the termination of your employment. Your signature below acknowledges that you have read this Agreement, understand its terms and have entered into it knowingly and voluntarily. Very truly yours, COMPUTER DATA SYSTEMS, INC. By: /s/ Clifford M. Kendall By: /s/ Hilliard W. Paige ----------------------- ---------------------- Clifford M. Kendall Hilliard W. Paige Chairman of the Board Chairman of Audit/ of Directors Compensation Committee ACCEPTED AND AGREED: By: /s/ Gordon S. Glenn ------------------- Gordon S. Glenn EX-11 3 Exhibit 11 ---------- STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
Years Ended June 30 ------------------- 1996 1995 1994 ---- ---- ---- Average shares outstanding 5,756,344 5,735,892 5,641,740 Dilutive effect of stock options computed by use of treasury stock method 179,178 166,527 274,758 ------------ ------------ ------------ Average common and common equivalent shares outstanding 5,935,522 5,902,419 5,916,498 ============ ============ ============ Computation of Earnings Per Share = Net Income divided by Average common and common equivalent shares $ 9,769,200 $ 8,050,900 $ 7,729,400 outstanding 5,935,522 5,902,419 5,916,498 ------------ ------------ ------------ Earnings Per Share $ 1.65 $ 1.36 $ 1.31 ============ ============ ============
EX-13 4 SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant(X) Filed by a Party other than the Registrant( ) Check the appropriate box: ( ) Preliminary Proxy Statement (X) Definitive Proxy Statement ( ) Definitive Additional Materials ( ) Soliciting Material Pursuant to section 240.14a-11(c) or section 240.14a-12 Computer Data Systems, Inc. (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (Check the appropriate box): (X) $125 per Exchange Act Rules 0-11(c)(1)(ii),14a-6(i), or 14a-6(j)(2). ( ) $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). ( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0- 11. 1) Title of each class of securities to which transaction applies: 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: 4) Proposed maximum aggregate value of transaction: ( ) Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: 2) Form, Schedule or Registration Statement No.: 3) Filing Party: 4) Date Filed: NOTICE OF ANNUAL MEETING OF STOCKHOLDERS, OCTOBER 22, 1996 The Annual Meeting of Stockholders of Computer Data Systems, Inc. ("CDSI") will be held at the Corporation's headquarters located at One Curie Court, Rockville, Maryland, on October 22, 1996 at 10:00 a.m., for the following purposes: 1. To elect a Board of Directors comprised of eight persons to serve until the next Annual Meeting and until their successors are duly elected and qualified; 2. To consider approval of the appointment of Ernst & Young LLP as independent auditors for the fiscal year ending June 30, 1997; and 3. To transact such other business as may properly come before the meeting or any adjournment thereof. Only holders of shares of Common Stock of record on the books of the Corporation at the close of business on September 3, 1996 will be entitled to notice of and to vote at the Annual Meeting or any adjournment thereof. You are cordially invited to be present at the Annual Meeting. IF YOU CANNOT ATTEND, PLEASE EXECUTE AND MAIL PROMPTLY THE ENCLOSED FORM OF PROXY, USING THE ENCLOSED RETURN ENVELOPE. By Order of the Board of Directors, /s/ Donald E. Ziegler --------------------- Donald E. Ziegler Secretary One Curie Court Rockville, Maryland 20850 September 17, 1996 COMPUTER DATA SYSTEMS, INC. ONE CURIE COURT ROCKVILLE, MARYLAND 20850 PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS OCTOBER 22, 1996 INFORMATION CONCERNING SOLICITATION AND VOTING General - ------- The following information is submitted concerning the enclosed form of proxy and the matters to be acted upon under authority thereof at the Annual Meeting of Stockholders of the Corporation to be held on the 22nd day of October 1996, commencing at 10:00 a.m., or at any adjournment thereof, pursuant to the accompanying notice of said meeting. The Annual Meeting will be held at the Corporation's headquarters located at One Curie Court, Rockville, Maryland 20850. The Corporation intends to mail this proxy statement and accompanying proxy to all stockholders entitled to vote at the Annual Meeting on or about September 17, 1996. Solicitation And Revocability Of Proxies - ---------------------------------------- The proxy is solicited on behalf of the Board of Directors of the Corporation. It may be revoked by the stockholder at any time prior to the exercise thereof by filing with the Secretary of the Corporation a written revocation or a duly executed proxy bearing a later date. The proxy shall be suspended if the stockholder shall be present at the meeting and elect to vote in person. Attendance at the meeting will not, by itself, revoke a proxy. Shares represented by proxies received will be voted. Where the stockholder has specified his choice with respect to the proposal to be acted upon, the shares will be voted in accordance with the specification so made, and in the absence thereof will be voted by the proxy holders as directed by management. The cost of solicitation of proxies will be borne by the Corporation. In addition to solicitation by mail, certain directors, officers and regular employees of the Corporation may solicit proxies by facsimile, telephone or personal interview for which they will receive no additional compensation. In addition, arrangements will be made with brokerage firms and other custodians, nominees and fiduciaries to forward solicitation material for the meeting to beneficial owners, and the Corporation will reimburse them for their reasonable expenses in so doing. Voting Rights And Oustanding Shares - ----------------------------------- Only stockholders of record on the books of the Corporation at the close of business on September 3, 1996, will be entitled to notice of and to vote at the Annual Meeting. As of that date, there were 5,937,470 shares of Common Stock issued and outstanding and entitled to vote. Each share of Common Stock is entitled to one vote for each matter submitted to the stockholders for approval. A majority of the outstanding shares entitled to vote must be present in person or represented by proxy at the Annual Meeting to constitute a quorum. Shares represented by properly executed proxies with respect to which a vote is withheld, an abstention is indicated, or a broker does not vote ("broker nonvotes") will be treated as shares that are present and entitled to vote for purposes of determining a quorum, but those shares will not be treated as having been voted for purposes of determining the approval of any matter submitted to the stockholders for a vote. Unless otherwise noted in this proxy statement, all matters to come before the meeting identified in the accompanying notice require the affirmative vote of a majority of those shares, present in person or by proxy and voting at the Annual Meeting, to be adopted, assuming that a quorum is present. INFORMATION WITH RESPECT TO CERTAIN STOCKHOLDERS The stockholders named in the following table are those known to the Corporation to be the beneficial owners of 5% or more of the Corporation's Common Stock. Unless otherwise indicated, the information is as of July 26, 1996. For purposes of this table, and as used elsewhere in this Proxy Statement, the term "beneficial owner" means any person who, directly or indirectly, has or shares the power to vote, or to direct the voting of a security or the power to dispose, or to direct the disposition of, a security. Except as otherwise indicated, the Corporation believes that each individual owner listed below exercises sole voting and dispositive power over their shares.
PERCENTAGE OF AMOUNT OF BENEFICIAL OUTSTANDING NAME AND ADDRESS OWNERSHIP (SHARES) COMMON STOCK - ---------------- -------------------- -------------- FMR Corporation 598,500 (1) 10.18% 82 Devonshire Street Boston, Massachusetts 02109 Calvin S. Koonce 445,106 (2) 7.57% 6229 Executive Boulevard Rockville, Maryland 20852 Clifford M. Kendall 342,634 (3) 5.83% One Curie Court Rockville, Maryland 20850
__________________________________ (1) As reported on Schedule 13G, dated April 9, 1996. Includes sole dispositive power over 598,500 shares. FMR Corp. beneficially owns the shares through its wholly-owned subsidiary, Fidelity Management and Research Corporation ("Fidelity"), an investment adviser to several investment companies registered under the Investment Corporation Act of 1940 that own shares of CDSI (the "Fidelity Funds"). The Board of Trustees of the Fidelity Funds has the authority to vote or direct the voting of the shares under written guidelines established by the Board of Trustees of the Fidelity Funds. FMR Corp. through control of Fidelity, and each of the Fidelity Funds has sole power to dispose of shares held by the Funds. Mr. Edward C. Johnson, Chairman of FMR Corp., reported in the statement on Schedule 13G sole dispositive power with respect to the shares owned by FMR Corp. (2) As reported on Schedule 13D, dated April 27, 1992. Number of shares adjusted to reflect the August 1993, 2-for-1 stock split effected in the form of a dividend. (3) Includes 123,994 shares held by Mr. Kendall's spouse and 13,000 shares subject to acquisition by the exercise of options exercisable within 60 days. ITEM 1: ELECTION OF DIRECTORS NOMINEES FOR ELECTION - --------------------- Eight directors, comprising the entire membership of the Board of Directors of the Corporation, are to be elected at the Annual Meeting. If elected, the directors will serve until the next Annual Meeting and until their successors are duly elected and qualified. Unless otherwise instructed, the proxy holders will vote the proxies received by them for the eight nominees shown below. Although it is not contemplated that any nominee will decline or be unable to serve as a director, in either such event, the proxies will be voted by the proxy holders for such other person as may be designated by the present Board of Directors. Each nominee for election is currently serving as a member of the Board. With the exception of Mr. Bracken, each nominee has also previously been elected by the stockholders. The names of the nominees and certain information about them are set forth below. Except as indicated, the principal occupation for the past five years of each nominee is as listed below.
PRINCIPAL NAME OCCUPATION ADDITIONAL INFORMATION ---- ---------- ---------------------- DR. RAYMOND B. HOXENG Retired Prior to his retirement in 1982, Director since 1968 Tampa, FL Dr. Hoxeng was involved in university Age 77 and hospital administration. His earlier career was distinguished by accomplishments in industrial engineering and research. CLIFFORD M. KENDALL Chairman of From 1970 to 1991, Mr. Kendall Director since 1970 the Board served as Chief Executive Officer Age 65 of the Corporation of the Corporation. Member-Executive Committee HILLIARD W. PAIGE Retired Mr. Paige is a former President of Director since 1974 Washington, DC General Dynamics Corporation. Age 76 Mr. Paige serves as a Director of The Member- Executive, Atlantic Council of the United States, Audit/Compensation Committees Washington, D.C. ELMER B. STAATS Retired Mr. Staats is a former Comptroller Director since 1981 Washington, DC General of the United States. Mr. Age 82 Staats serves as Chairman of the Member-Executive, Financial Accounting Standards Audit/Compensation Committees Advisory Board, Washington, D.C.
PRINCIPAL NAME OCCUPATION ADDITIONAL INFORMATION ---- ---------- ---------------------- WYATT D. TINSLEY Executive Mr. Tinsley serves as the Corporation's Director since 1988 Vice President Chief Financial Officer. Age 53 PAUL R. IGNATIUS Retired Mr. Ignatius is a former Secretary of Director since 1991 Washington, DC the Navy. From 1987 to December Age 75 1993, Mr. Ignatius served as the Member-Executive, Chairman of the Board, Logistics Audit/Compensation Committees Institute, Bethesda, MD. JAMES A. PARKER President, Mr. Parker serves as President of Director since 1991 Jay Parker & the Lincoln Institute for Research Age 59 Associates, & Education, Inc., a non-profit Member-Executive, Washington, DC public policy organization in Audit/Compensation Committees (International Washington, D.C. Consulting Firm) PETER A. BRACKEN President and Mr. Bracken has served as President Director since 1996 Chief Executive and Chief Executive Officer since Age 55 Officer May 1996. Prior to joining CDSI, Mr. Bracken served as President of the Information Sciences Group of Lockheed Martin Corporation.
MEETINGS AND COMMITTEES OF THE BOARD - ------------------------------------ The Corporation has standing Executive and Audit/Compensation Committees of the Board of Directors. The Board of Directors does not have a Nominating Committee. The Board of Directors of the Corporation held four meetings during the fiscal year ended June 30, 1996. All directors attended at least 75% of the aggregate number of meetings of the Board of Directors and Committees on which they served. Overall attendance at such meetings was 99%. The Executive Committee has the power and authority of the Board of Directors and meets several times during the year in months when the Board of Directors does not meet. Messrs. Kendall, Paige, Staats, Ignatius and Parker serve on the Executive Committee. In the fiscal year ended June 30, 1996, the Executive Committee met five times. The Audit/Compensation Committee makes recommendations regarding the engagement of the Corporation's independent auditors, reviews the arrangement and scope of the audit, considers comments made by the independent auditors with respect to the adequacy of the Corporation's internal accounting controls, and reviews non-audit services provided by the firm. In addition, this committee reviews and approves (or recommends to the full Board) the annual salary, bonus and other benefits of senior management of the Corporation; reviews and makes recommendations to the Board relating to executive compensation and plans; and establishes, and periodically reviews, the Corporation's policy with respect to management perquisites. The Audit/Compensation Committee also presently serves as the committee of disinterested persons who administer the Corporation's 1991 Long-Term Incentive Plan. Messrs. Paige, Staats, Ignatius and Parker serve on the Audit/Compensation Committee. During the fiscal year ended June 30, 1996, the Audit/Compensation Committee met five times. COMPENSATION OF DIRECTORS - ------------------------- Directors who are employees receive no additional compensation for serving as directors. In the fiscal year ended June 30, 1996, non-employee directors received the following amounts for each meeting of the Board of Directors they attended: Dr. Hoxeng received $2,000 per meeting and Messrs. Paige, Staats, Ignatius, and Parker each received $1,200. Messrs. Paige, Staats, Ignatius, and Parker also received a retainer of $12,000 each in the fiscal year ended June 30, 1996, for services rendered as members of the Executive and Audit/Compensation Committees of the Board of Directors. Pursuant to the Corporation's 1991 Long-Term Incentive Plan (the "Plan"), non-employee directors of the Corporation also are granted stock options upon being named a director and thereafter on an annual basis. In the fiscal year ended June 30, 1996, each non-employee director was granted options to purchase 1,500 shares. The options become exercisable one year after the date of grant and expire five years from the date of grant. EXECUTIVE COMPENSATION REPORT OF AUDIT/COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION - ---------------------------------------------------------------- The Audit/Compensation Committee of the Board of Directors, which is composed of outside directors of the Corporation, is responsible for developing and recommending to the Board of Directors the Corporation's general compensation policies. The Committee approves the compensation plans for the Corporation's executive officers, including the Chief Executive Officer (CEO), and determines the compensation to be paid to the executive officers. The Audit/Compensation Committee also is responsible for the granting of stock options to the executive officers and the administration thereof. The Audit/Compensation Committee has furnished the following report for fiscal year 1996: Compensation Philosophy. The following general principles have been adopted by the Committee and represent the guidelines upon which compensation decisions are based. Executive compensation is designed to: Provide a competitive total compensation package that enables the Corporation to attract and retain key executives who demonstrate outstanding performance, technical expertise, business responsibility, personal integrity, and professionalism. Encourage cooperation and coordination among executives to meet the Corporation's long-term business objectives and strategy. Provide variable compensation that is directly linked with the financial performance of the Corporation and the achievement of increased stockholder value. Executive Officer Compensation. The Corporation's executive compensation program consists of three main components: (i) annual base salary, (ii) annual incentive cash bonus, and (iii) equity participation. The executive officers, including the CEO, are eligible for the same benefits, including group health and life insurance and participation in the Corporation's Employee Retirement Plan and 401(k) Savings Plan, as are available generally to the Corporation's professional staff. The Corporation also provides whole life "split dollar" insurance policies on the lives of the executive officers. The Corporation is the beneficiary of the amount of its premiums paid with the remaining amounts payable to the officers' estates. The executives may elect, under certain circumstances, to convert the policy to an annuity based on the cash value less premiums paid. The compensation policies that are administered by the Committee are further explained below: Base Salary - Base salaries are competitive, but not excessive, assuring the Corporation the ability to attract and retain qualified officers yet maintain a relatively low cost structure for officer salaries. Base pay levels are reviewed annually and established through comparisons with other professional services firms of similar size and complexity. Annual Incentive - Executive officers participate as a team in an incentive compensation program with awards based on the attainment of predetermined financial targets set annually by the Committee and on individual performance. For 1996, the targets were based on achieving certain Corporation pre-tax levels of income. The objective is to reward executives for meeting the predetermined targets and provide opportunities for above average earnings by attaining superior financial results for the Corporation and the stockholders. Equity Participation - Non-qualifying stock option awards are granted annually based on performance and serve as an incentive to enhance stockholder value. Options are issued to executive officers, (as well as other line officers and key employees) who have substantial responsibility for the management and growth of the Corporation. Options granted are evidenced by an agreement setting forth the number of shares awarded, and such other terms and conditions as determined by the Committee. Options vest and become exercisable in annual installments of twenty-five percent of the shares covered by each grant commencing on the first anniversary of the grant date and expire in five years from the grant date. In setting the size of grants for the CEO and other executives, the Committee considers their position, individual performance, stock options presently held, and the total number of shares available for the issuance under the Corporation's stock option plan. Compensation of the Current and Former CEO. The annual salary for the President and CEO is established by the Audit/Compensation Committee using the same criteria as discussed above for the executive officers. The CEO's annual incentive compensation payment is determined by the Committee largely based on whether targets for the Corporation's pre-tax income are met. The amount of stock options granted to the CEO are intended to align the future rewards of the CEO with the interests of the stockholders. Gordon S. Glenn, who served as President and CEO of the Corporation since 1991, resigned from this position effective April 30, 1996. Mr. Glenn's salary for fiscal year 1996 was $256,231, which represents an increase of approximately twenty-three percent over his salary for the previous year. The percentage of increase reflects the Committee's desire to bring the Corporation's compensation for its top executives more in line with industry standards. Mr. Glenn's cash award for fiscal year 1996 (shown in the Bonus column of the Summary Compensation Table) was determined based on the Corporation's performance with respect to the targets for 1996 pre-tax profits. Mr. Glenn was also awarded stock options at the beginning of fiscal year 1996. As part of his separation agreement with the Corporation, Mr. Glenn continued to draw his regular salary through the end of July 1996 and will continue to serve the Corporation as a consultant during fiscal year 1997. Peter A. Bracken, the current President and CEO, joined the Corporation on May 13, 1996. His compensation package, including salary and grant of stock options, was established by the Audit/Compensation Committee and is consistent with the Corporation's philosophy for executive compensation set out above. Mr. Bracken was not eligible for an incentive compensation payment for fiscal year 1996. Tax Compliance Policy. Section 162(m) of the Internal Revenue Code generally limits to $1,000,000 the tax deductible compensation paid to the CEO and to each of the four highest-paid executives employed as executive officers on the last day of the fiscal year. However, the limitation does not apply to performance- based compensation provided certain conditions are satisfied. The Committee does not anticipate that in the foreseeable future any officer of the Corporation will earn compensation in excess of $1 million that would not qualify as performance-based compensation. Therefore, the Committee has not yet determined a policy with respect to Section 162(m). The Committee intends to review the implications of Section 162(m) when it becomes more relevant with respect to the Corporation's executive compensation policies. The Audit/Compensation Committee Hilliard W. Paige Paul R. Ignatius Elmer B. Staats James A. Parker SEPARATION AGREEMENT WITH FORMER PRESIDENT AND CHIEF EXECUTIVE OFFICER In April 1996, the Corporation entered into a separation agreement with Gordon S. Glenn in connection with his resignation from CDSI. While Mr. Glenn resigned as a Director and as President and Chief Executive Officer of CDSI, and from all positions with CDSI subsidiaries and affiliates effective April 30, 1996, Mr. Glenn agreed to remain as a full-time employee of the Corporation through July 31, 1996. Pursuant to the terms of the agreement, Mr. Glenn received a one-time severance payment of $100,000 and certain other benefits. In addition, Mr. Glenn agreed to continue to serve the Corporation as a consultant for a portion of fiscal year 1997. The consultant fees payable to Mr. Glenn under the agreement could reach $215,000, depending upon when Mr. Glenn secures another full-time position. EXECUTIVE OFFICERS - ------------------ CLIFFORD M. KENDALL, age 65, has been with CDSI since its founding in 1968 and is currently the Chairman of the Board of Directors. From 1970 to 1991, Mr. Kendall served as Chief Executive Officer of the Corporation. PETER A. BRACKEN, age 55, joined the Corporation in May 1996 as President and Chief Executive Officer. From 1986 to 1996, Mr. Bracken was employed by Martin Marietta Corporation (now Lockheed Martin Corporation), most recently as President of the Information Sciences Group. Before joining Martin Marietta in 1986, Mr. Bracken served as Director of Mission Operations and Data Systems for NASA's Goddard Space Flight Center. WYATT D. TINSLEY, age 53, is currently Executive Vice President and the Corporation's Chief Financial Officer. Mr. Tinsley joined CDSI in 1969. MARY ANN MAYHEW, age 44, is currently President of the CDSI Information Technology Solutions Company, a division of the Corporation ("CDSI ITS"). Ms. Mayhew joined CDSI in 1980. THOMAS A. GREEN, age 50, is currently President of the CDSI Business Applications Solutions Company, a division of the Corporation ("CDSI BAS"). Mr. Green joined CDSI in 1976. EDWARD D. JOHNSON, age 42, is currently Senior Vice President of CDSI ITS. Mr. Johnson joined CDSI in 1981. DONALD E. ZIEGLER, age 47, is currently Treasurer and Secretary of the Corporation. Mr. Ziegler joined CDSI in 1982. SUMMARY COMPENSATION TABLE The following table reports the compensation paid or accrued during the three fiscal years ended June 30, 1996, for those individuals serving as President and Chief Executive Officer of CDSI during fiscal year 1996 and for each of the four other most highly compensated CDSI executive officers.
ANNUAL COMPENSATION COMPENSATION ------------------- ------------ YEAR OTHER SECURITIES NAME AND ENDED ANNUAL UNDERLYING ALL OTHER PRINCIPAL POSITION 6/30 SALARY BONUS COMPENSATION OPTIONS (#) COMPENSATION(1) - ------------------ ---- ------ ----- ------------ ----------- --------------- CLIFFORD M. KENDALL 1996 $178,769 $142,000 ----- 8,000 $ 17,290 Chairman of the Board 1995 $148,000 $148,000 ----- 6,000 $ 16,259 1994 $148,000 $148,000 ----- 8,000 $ 15,329 PETER A. BRACKEN 1996 $ 28,846 N/A $21,750(2) 40,000 $ 361 President and Chief Executive Officer WYATT D. TINSLEY 1996 $149,385 $118,500 ----- 12,000 $ 11,304 Chief Financial 1995 $131,846 $130,000 ----- 6,000 $ 10,336 Officer 1994 $126,769 $124,000 ----- 8,000 $ 9,749 MARY ANN MAYHEW 1996 $149,038 $118,500 ----- 12,000 $ 10,142 President, CDSI ITS 1995 $122,654 $121,000 ----- 6,000 $ 9,355 1994 $112,769 $110,000 ----- 8,000 $ 8,609 THOMAS A. GREEN 1996 $149,077 $118,500 ----- 12,000 $ 10,533 President, CDSI BAS 1995 $123,077 $121,000 ----- 6,000 $ 8,954 1994 $114,808 $ 66,000 ----- 6,000 $ 8,312 GORDON S. GLENN 1996 $256,231 $203,820 ----- 24,000 $111,927(3) Former President and 1995 $208,231 $205,000 ----- 30,000 $ 11,124 Chief Executive Officer 1994 $199,615 $195,000 $40,298(4) 40,000 $ 13,031
_________________________ (1) Amounts represent: (a) Corporation contributions to qualified and non- qualified employee retirement plans (including matching contributions to the 401(k) Savings Plan) and (b) Split Dollar Life Insurance. The values for two component amounts for each named executive officer are as follows for the fiscal year ended June 30, 1996: Mr. Kendall, (a) $10,480 and (b) $6,810; Mr. Bracken, (a) $361 and (b) 0; Mr. Tinsley, (a) $10,268 and (b) $1,036; Ms Mayhew, (a) $9,692 and (b) $450; Mr. Green, (a) $10,256 and (b) $277; and Mr. Glenn, (a) $10,967 and (b) $960. (2) Mr. Bracken joined the Corporation as President and CEO on May 13, 1996. Amount shown represents fees paid to Mr. Bracken for consulting services provided between April 10 and May 13. (3) Mr. Glenn resigned as President and CEO as of April 30, 1996 and resigned from the Corporation effective July 31, 1996. Amount includes $100,000 severance payment accrued before the close of fiscal year ended June 30, 1996. (4) Amount includes the $35,000 initiation fee paid by the Corporation on behalf of Mr. Glenn for membership in a local country club. OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE AT PERCENT OF ASSUMED ANNUAL RATES OF TOTAL OPTIONS EXERCISE STOCK PRICE APPRECIATION FOR OPTIONS GRANTED TO OR BASE OPTION TERM(4) GRANTED EMPLOYEE IN PRICE EXPIRATION NAME (#) FISCAL YEAR(1) ($/SHR)(2) DATE(3) 5%($) 10%($) - ---- ------- -------------- ---------- ---------- -------- -------- Clifford M. Kendall 8,000 3.6% $11.25 07/18/00 $ 24,817 $ 54,946 Peter A. Bracken 40,000 18.2% $21.75 05/13/01 $240,365 $531,144 Wyatt D. Tinsley 12,000 5.5% $11.25 07/18/00 $ 37,226 $ 82,419 Mary Ann Mayhew 12,000 5.5% $11.25 07/18/00 $ 37,226 $ 82,419 Thomas A. Green 12,000 5.5% $11.25 07/18/00 $ 37,226 $ 82,419 Gordon S. Glenn(5) 24,000 10.9% $11.25 10/31/96 $ 18,613 $ 41,209
______________________________ (1) Stock options exercisable into 219,900 shares of Common Stock were granted to all employees and non-employee directors of the Corporation as a group during the fiscal year ended June 30, 1996. (2) The exercise price is the closing market price on the date of grant. (3) Options vest and become exercisable in annual installments of 25% of shares covered by each grant commencing on the first anniversary of the grant date, and expire in five years from the grant date. (4) The dollar amounts under the potential realizable values columns use the 5% and 10% rates of appreciation permitted by the SEC, and are not intended to forecast actual future appreciation in the stock price. Actual gains, if any, on stock option exercises are dependent on the future performance of the Corporation's Common Stock. There can be no assurance the amounts reflected in this table will be achieved. The assumed rates are compounded annually to the full five-year term of the options. (5) Mr. Glenn resigned from the Corporation effective July 31, 1996. Pursuant to the terms of the Stock Option Agreement governing the July 18, 1995 grant, Mr. Glenn had until October 31, 1996 to exercise options for 6,000 shares which were exercisable on the date of his resignation. The remainder of the options granted expired upon his resignation. AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
NUMBER OF VALUE OF UNEXERCISED OPTIONS EXERCISED IN FY 1996 UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS ---------------------------- AT 6/30/96 AT 6/30/96(2) ---------- ------------- SHARES ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/ NAME EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE ---- ----------- -------------- ----------------- --------------------- Clifford M. Kendall 4,100 $ 21,860 5,500 / 18,500 $ 66,188 $211,563 Peter A. Bracken -0- -0- -0- / 40,000 -0- $ 20,000 Wyatt D. Tinsley -0- -0- 19,900 / 22,500 $316,913 $255,563 Mary Ann Mayhew 8,200 $ 87,938 5,500 / 22,500 $ 66,188 $255,563 Thomas A. Green -0- -0- 9,100 / 20,750 $131,869 $229,688 Gordon S. Glenn(3) 97,500 $1,621,563 -0- / 76,500 -0- $881,813
______________________________ (1) Value is calculated based on the difference between the option price and the closing market price of the Common Stock on the date of the exercise multiplied by the number of shares to which the exercise relates. (2) The closing price for the Corporation's Common Stock as reported by the Nasdaq Stock Market on June 28, 1996 was $22.25. Value is calculated on the basis of the difference between the option exercise price and $22.25, multiplied by the number of shares of Common Stock underlying the option. (3) Mr. Glenn resigned from the Corporation effective July 31, 1996. Options for 43,000 shares, which were unexercisable as of that date, expired by their terms upon his resignation. SECURITIES OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth certain information regarding beneficial ownership of the Corporation's Common Stock as of July 26, 1996 by: (i) each director of the Corporation, (ii) each executive officer (and former executive officer) named in the table above labeled Summary Compensation Table, and (iii) all directors and executive officers of the Corporation as a group. This table is based on information provided by the Corporation's directors and executive officers. Unless otherwise indicated in the footnotes below, and subject to community property laws where applicable, each of the named persons exercises sole voting and dispositive power over his or her shares.
NAME OF AMOUNT OF PERCENTAGE BENEFICIAL BENEFICIAL OF OUTSTANDING OWNER OWNERSHIP COMMON STOCK - ---------- ---------- -------------- Peter A. Bracken 1,000 * Gordon S. Glenn 143,846 (1) 2.45% Thomas A. Green 23,904 (2) * Raymond B. Hoxeng 40,000 (3) * Paul R. Ignatius 11,500 (4) * Clifford M. Kendall 342,634 (5) 5.83% Mary Ann Mayhew 25,902 (6) * Hilliard W. Paige 21,000 (7) * James A. Parker 11,728 (8) * Elmer B. Staats 27,500 (9) * Wyatt D. Tinsley 37,563 (10) * All directors & executive officers as a group (15 persons) 812,045 (11) 13.81%
____________________________ * Less than one percent (1) Mr. Glenn resigned from the Corporation effective July 31, 1996. (2) Includes 14,250 shares subject to acquisition by the exercise of options exercisable within 60 days. (3) Includes 3,000 shares subject to acquisition by the exercise of options exercisable within 60 days. Shares are held in two revocable trusts, one in Dr. Hoxeng's name (17,000 shares) and one in the name of Dr. Hoxeng's spouse (20,000 shares). Dr. Hoxeng and his spouse are co-trustees of both trusts. (4) Includes 5,000 shares subject to acquisition by the exercise of options exercisable within 60 days. (5) Includes 123,994 shares held by Mr. Kendall's spouse and 13,000 shares subject to acquisition by the exercise of options exercisable within 60 days. (6) Includes 12,000 shares subject to acquisition by the exercise of options exercisable within 60 days. (7) Includes 5,000 shares subject to acquisition by the exercise of options exercisable within 60 days. (8) Includes 6,117 shares subject to acquisition by the exercise of options exercisable within 60 days. (9) Includes 7,000 shares subject to acquisition by the exercise of options exercisable within 60 days. (10) Includes 20,000 shares subject to acquisition by the exercise of options exercisable within 60 days. (11) Includes 105,267 shares subject to acquisition by the exercise of options exercisable within 60 days. FIVE-YEAR STOCKHOLDER RETURN COMPARISON Set forth below is a line-graph presentation comparing the cumulative stockholder return on the Corporation's Common Stock, on an indexed basis, against the cumulative total returns of the Nasdaq Stock Market - U.S. Index and the S&P Computer Software and Services Index for the period of the Corporation's last five fiscal years (June 30, 1991 = 100): COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG COMPUTER DATA SYSTEMS, INC., THE NASDAQ STOCK MARKET-US INDEX AND THE S & P COMPUTER SOFTWARE & SERVICES INDEX
6/91 6/92 6/93 6/94 6/95 6/96 ---- ---- ---- ---- ---- ---- Computer Data Systems, Inc. 100 132 240 355 286 584 Nasdaq Stock Market - U.S 100 120 151 153 204 261 S&P Comptr Softwr & Svcs. 100 113 167 189 294 392
* $100 INVESTED ON 06/30/91 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF DIVIDENDS. FISCAL YEAR ENDING JUNE 30. [The above data appears as a line graph in the version of this document distributed to stockholders.] ITEM 2: APPROVAL OF INDEPENDENT AUDITORS At the Annual Meeting, the stockholders will be asked to approve the appointment of Ernst & Young LLP as the Corporation's independent auditors for the fiscal year ending June 30, 1997. The Audit/Compensation Committee has recommended that the appointment of Ernst & Young LLP be approved by the stockholders. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting with the opportunity to make a statement if they desire to do so, and such representatives are expected to be available to respond to appropriate questions. Approval of the selection of the independent auditors will require the affirmative vote of holders of shares of Common Stock representing a majority of the number of votes present in person or represented by proxy at the Annual Meeting, provided a quorum is present. THE BOARD OF DIRECTORS RECOMMENDS THAT ALL STOCKHOLDERS VOTE FOR APPROVAL OF THE INDEPENDENT AUDITORS SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Corporation's directors and executive officers to file reports of ownership and changes of ownership with the SEC and the Nasdaq Stock Market. The Corporation believes that during the period from July 1, 1995 through June 30, 1996, its directors and executive officers complied with all applicable Section 16(a) filing requirements except that one Form 4 filed on behalf of Mr. Kendall reporting the sale of securities in May 1996 was inadvertently filed four days late. STOCKHOLDER PROPOSALS In order for a stockholder proposal to be considered for the 1997 Annual Meeting of Stockholders, it must be received by the Corporation at its offices no later than May 23, 1997. All such stockholder proposals should be mailed to the Corporation's headquarters and addressed to the attention of Donald E. Ziegler, Secretary. To be eligible for inclusion in next year's proxy material, such proposals must conform to the requirements set forth in Regulation 14A under the Securities Exchange Act of 1934, as amended. In order to be considered at an Annual Meeting, a stockholder proposal must be presented by the proponents or their representatives in attendance at the meeting. OTHER MATTERS The Board of Directors does not know of any other matters to be presented at the Annual Meeting or action to be taken thereat except those set forth in this Proxy Statement. If, however, any other business properly comes before the Annual Meeting, the persons named in the proxy accompanying this Proxy Statement will have the discretionary authority to vote upon such business, as well as matters incident to the conduct of the Annual Meeting. UPON THE WRITTEN REQUEST OF ANY RECORD HOLDER OR BENEFICIAL OWNER OF COMMON STOCK ENTITLED TO VOTE AT THE ANNUAL MEETING OF STOCKHOLDERS, THE CORPORATION WILL PROVIDE WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10- K, INCLUDING THE FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES, REQUIRED TO BE FILED WITH THE SEC FOR THE CORPORATION'S MOST RECENT FISCAL YEAR. ADDRESS REQUESTS TO DONALD E. ZIEGLER, SECRETARY, COMPUTER DATA SYSTEMS, INC., ONE CURIE COURT, ROCKVILLE, MARYLAND 20850. APPENDIX - Proxy Card PROXY 1996 (CDSI LOGO) The undersigned hereby appoints Clifford M. Kendall, Peter A. Bracken, and Wyatt D. Tinsley, and each of them, as Proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated below, all the shares of Common Stock of Computer Data Systems, Inc., held of record by the undersigned on September 3, 1996, at the Annual Meeting of Stockholders to be held October 22, 1996, or any adjournment thereof. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL LISTED NOMINEES AND FOR PROPOSAL #2. 1. Election of Directors: Raymond B. Hoxeng, Clifford M. Kendall, Hilliard W. Paige, Elmer B. Staats, Wyatt D. Tinsley, Paul R. Ignatius, James A. Parker, Peter A. Bracken --- FOR --- WITHHOLD AUTHORITY all nominees for all nominees FOR, EXCEPT AUTHORITY TO VOTE WITHHELD FOR THE FOLLOWING NOMINEE(S) ONLY: ____________________________________________ 2. Approval of the appointment of Ernst & Young LLP as the Corporation's independent auditors. --- FOR --- AGAINST --- ABSTAIN PLEASE SIGN YOUR NAME(S) ON THE REVERSE SIDE. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IF PROPERLY EXECUTED, IT WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES AND FOR PROPOSAL # 2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF. Please sign your name exactly as it appears below. If shares are held jointly, all holders must sign. When signing in a fiduciary or representative capacity (attorney, executor, administrator, trustee, guardian, officer of corporation, etc.), please give full title as such. The signer hereby revokes all proxies heretofore given by the signer to vote at such meeting or any adjournment thereof. Dated:......................, 1996 ....................................... Signature ....................................... Signature if held jointly PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. EX-21 5 Exhibit 21 ---------- SIGNIFICANT SUBSIDIARIES OF THE CORPORATION Active subsidiaries of Computer Data Systems, Inc. and their subsidiaries as of June 30, 1996, are listed below. The names of certain subsidiaries, which considered in the aggregate would not constitute a significant subsidiary, have been omitted.
State or Name Country of Organization ---- ----------------------- CDSI International, Inc. Delaware CDSI Argentina, S.A. Argentina
EX-23 6 Exhibit 23 ---------- Consent of Ernst & Young LLP, Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form 33-47358) pertaining to the Computer Data Systems, Inc. 1991 Long Term Incentive Plan of our report dated July 26, 1996, with respect to the consolidated financial statements of Computer Data Systems, Inc. included in the Annual Report (Form 10-K) for the year ended June 30, 1996. /s/ Ernst & Young LLP Washington, D.C. September 26, 1996 EX-27 7
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CDSI'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND THE NOTES THERETO. 0000022989 COMPUTER DATA SYSTEMS, INC. YEAR JUN-30-1996 JUN-30-1996 3,639,600 0 61,479,200 0 0 67,777,500 32,403,100 3,419,500 103,053,900 37,810,800 0 0 0 586,700 59,663,000 103,053,900 0 251,098,700 0 235,368,600 0 0 185,400 15,998,000 6,228,800 9,769,200 0 0 0 9,769,200 1.65 1.65
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